In Funding Health Care Reform, The World According to AARP

Group expected to play key role in fight to increase alcohol tax


by Douglas Tallman
Staff Writer
Maryland Community Newspapers Online
Gazette.com
February 5,2010

ANNAPOLIS — As lawmakers debate whether to impose an election-year tax increase on alcoholic beverages, the Maryland chapter of AARP is supporting the tax as a means to pay for expanded health care.

The organization, with 850,000 members, has played significant roles in previous tax and health care issues in Maryland, including 2007 efforts to double the tobacco tax and expand Medicaid.

"They are a powerful organization. They have clout because of their name, and they have a lot of people," said Vincent DeMarco, president of the Maryland Citizens Health Initiative.

AARP's involvement can be critically important, Sen. Richard S. Madaleno Jr. said.

"It helps spread the word around the state to make the case outside of Annapolis on why this is needed and needed now," said Madaleno (D-Dist. 18) of Kensington.

Conventional wisdom might say senior citizens generally oppose tax increases. And that same wisdom would say a tax increase in an election year is a non-starter.

"Our members vote; they are concerned about promises made in 2007 and 2008 that have not been kept," said Rawle Andrews Jr., AARP's interim state director.

The unmet promises involve the 2007 Medicaid coverage expansion. Childless adults, which would include grandparents caring for an adult child's children, were to be insured by that expansion, but the plan was set aside because of the recession.

"People are suffering in silence because they can't get the health care coverage that they need," Andrews said.

Ted Meyerson, president of United Seniors of Maryland, a consortium of 65 organizations that advocate for senior citizens, said his members could support the increase.

"They would not be opposed to an increase in the alcohol tax," Meyerson said. "They know that you're going to have to have revenue to get out of this. They're willing to pay their fair share."

Even with the support of seniors, the tax has an uphill climb. The General Assembly's Democratic leadership said it doesn't want to see tax increases during the 2010 session, most recently in a Jan. 29 letter to the Republican leadership from Senate Budget and Taxation Committee Chairman Ulysses Currie and House Appropriations Chairman Norman H. Conway.

House Minority Leader Anthony J. O'Donnell said the alcohol tax would hurt the hospitality industry.

"This will cost people's jobs, jobs, jobs, and I'm opposed, opposed, opposed," said House Minority Leader Anthony J. O'Donnell (R-Dist. 29C) of Lusby.

The sentiment was echoed by Zsoka McDonald, spokeswoman for Diageo, an alcoholic beverage company based in London. Three-hundred employees work at its bottling plant in Relay, Md., McDonald said.

"Any increase on taxes would certainly impact our employees, but it would also impact employees of local businesses in Maryland," she said.

"It's a regressive tax. Any regressive taxes will hurt consumers, and it will have an impact on jobs. And in this economy we can't afford to have [that] happen."

But Sen. Verna Jones, a member of the Budget and Taxation Committee who will be the lead sponsor of the tax in the upper chamber, said no one group should have more privileges than another.

"Everybody has to suffer a little bit so everybody can gain a lot," said Jones (D-Dist. 44) of Baltimore.

And to Andrews, it's a user's tax. "If you enjoy an adult beverage, then you pay a little more," he said.

Proponents expect to introduce legislation this week that would call for significant increases in the tax — to a dime a drink. A Johns Hopkins University study estimates the increase would raise $214 million.

The tax currently is divided between spirits and beer and wine. For spirits, the tax is two cents for 1.5 ounces. On beer, the tax is one cent on 12 ounces. And a 5.5-ounce glass of wine has a two-cent levy. The money would support the Developmental Disability Support Fund, the Addiction Treatment and Prevention Fund and the Mental Health Care Fund. More than 40 percent of the funding would go to Medicaid to cover childless adults.

Del. William Bronrott, a House sponsor of the legislation, said health programs have been hit disproportionately by the recession.

"A lot of backs are up against the wall, and many families are suffering," said Bronrott (D-Dist. 16) of Bethesda.

The proposal pits AARP and other supporters against the liquor lobby, which has fended off previous attempts to increase the tax. The beer and wine tax hasn't changed since 1972, and the spirits levy has been the same since 1955, Bronrott said.

"We're going to see whether the legislature is driving under the influence of the liquor lobby," quipped Sen. Jamie Raskin (D-Dist. 20) of Silver Spring.

Last year, AARP took heat for supporting federal health-care reform, losing almost 150,000 members nationwide. The organization hasn't found similar concerns at the state level, Andrews said.

"What we find out when we go out to the chapters, the chapters are divided. There's virtually no one chapter where everyone is saying, ‘We're walking out the door and you can have your AARP banner back,'" Andrews said.

Despite the health-care controversy, the organization's membership is up 2 million nationwide, Andrews said, and would fight to get all its members back.

"The people who left, our extended family, may not come to the next birthday party," he said. "But by the time of the next family reunion, they're going to come back to us."

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